Federal Update: Congress Passes Budget

Just before midnight on December 15, House leaders revealed the details of two legislative packages for passage before Congress adjourns for the holidays.

The FY2016 omnibus appropriations package will fund federal agencies and programs through September 30, 2016. Many of the earlier debated policy riders were omitted from the bill. However, the $1.1 trillion spending package does include a two-year delay of the tax on benefit-rich health insurance plans (for 2018 and 2019) as well as a one-year delay of the health insurance tax (for 2017). Some of the other health-related provisions include the following:

IPAB operational funding was cut by $15B (although the panel has never actually been established)

Breast cancer screening recommendations issued by the USPTF were blocked for 2 years

AHRQ funding was cut by $30M (earlier House version had zeroed out agency funding)

The annual ban on using CDC funding for gun violence epidemiological research was extended

A second $650B package extends a broad range of tax-related polices, including a two-year moratorium on the medical device tax.

There had been considerable discussion on a package of additional Medicare policies, including providing authority for CMS to expedite hardship exemptions from Meaningful Use penalties for eligible entities who were not able to comply with program requirements due to the lateness of the modified Stage 2 rule for 2015. Though these provisions were not included in the omnibus appropriations package, discussions continue on the Hill and the situation remains fluid.

Because the details of the omnibus spending and tax packages were released later than expected, there was not enough time for both chambers to pass them before the current continuing resolution expired at midnight last night. As a result, a second continuing resolution was passed to extend federal funding through December 22.

The omnibus spending and tax bills will be considered as amendments to an existing military appropriations bill (H.R. 2029). The House plans to vote on the tax package on December 17, and the omnibus spending package on Friday, December 18. Both measures will then be combined into H.R. 2029 and sent to the Senate, which could act as early as Friday.

Highlights of Omnibus Budget Bill

Centers for Medicare & Medicaid Services: ACA-related Provisions

Transfers funds from the Prevention and Public Health (PPH) Fund to other HHS divisions (see below), and requires the Secretary to create a publicly accessible dedicated website providing information about the use of the funds and the divisions in charge of the funds; each funding opportunity announcement and RFP; and the identification of each grant, cooperative agreement or contract of $25,000 or more; a report detailing the use of all PPH funds transferred during FY2016, and semiannual reports from each entity awarded grants of $25,000 or more during FY2013-2016.

Requires the Secretary to provide detailed cost information that details the use of all funds by CMS for health insurance exchanges for each fiscal year since the enactment of the ACA and the proposed uses for such funds for FY2017.

Continues bill language to prevent the CMS Program Management appropriation account from being used to support insurer risk corridor payments.

Requires the Secretary to include in the FY2017 Budget Justification an analysis of how section 2713 of the ACA (coverage of preventive services) will impact eligibility for discretionary HHS programs.

Centers for Disease Control & Prevention

Includes a program level of $7.233B, which includes $6.326B in appropriated funds ($300M above the FY2015 program level). In addition, it provides $892.3M in transfers from the Prevention and Public Health (PPH) Fund (so, blocks the use of PPH Funds for PPH purposes and transfers the money to CDC and other divisions within HHS for other health purposes, including diabetes, heart disease and stroke prevention program, Million Hearts Program, Preventive Health and Health Services Block Grants, Office of Smoking and Health, Section 317 Immunization Grants) and $15M in Public Health and Social Services Emergency Fund (PHSSEF) unobligated balances from pandemic influenza supplemental appropriations.

Prioritizes funding on critical disease prevention and bio-defense research activities to protect against and prevent infectious diseases and to prepare for potential bio-terror attacks.

$5.6M for Illicit Opioid Risk Factors: Report language directs CDC to expand surveillance of heroin-related deaths beyond CDC's current work in HHS's Region 1 and to require applicants for the PDO Prevention for States Programs to collaborate with the state's substance abuse agency or agency managing the state's Prescription Drug Monitoring Program.

Antibiotic Resistance Initiative - $160M in mostly new funding: Report language directs CDC to support States in the use of evidence-based approaches to stop the spread of drug-resistant bacteria and preserve existing antibiotics.

Influenza - level funded at $186M.

Section 317 Immunization program - level funded at $610.8M.

Chronic Disease Prevention and Health Promotion: $20M for National Diabetes Prevention Program and $170.1M for other diabetes programs; $160M for Heart Disease and Stroke; $49.9M for Nutrition, Physical Activity and Obesity programs; $210M for Tobacco Prevention Programs.

$160M for the Preventive Health & Health Services Block Grant for state public health needs.

National Institutes of Health

Provides an increase of $100M for research to combat Antimicrobial Resistance; increase of $350M for Alzheimer’s disease research; increase of $85M for the BRAIN Initiative; and $200M for the Precision Medicine Initiative.

NIH is expected to consider burden of disease when setting priorities and developing strategic plans to address conditions such as diabetes, heart disease, cancer, and Alzheimer’s Disease with significant opportunity to improve the health of the American population by targeting funding toward cures and better treatments.

Substance Abuse and Mental Health Services Administration

$50M increase over FY2015 for the Mental Health Block Grant Program, and increases the set-aside to 10% for evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders. The balance of the increase to the block grants will provide over $20M in additional funds to states/territories through their traditional formula grants.

$15M to implement the Assisted Outpatient Treatment Grant Program for Individuals with Serious Mental Illness.

Provides $25M, an increase of $13M, to expand services that address prescription drug abuse and heroin use in high-risk communities. The Report language states “the Center for Substance Abuse Treatment is directed to include as an allowable use medication-assisted treatment and other clinically appropriate services to achieve and maintain abstinence from all opioids and heroin and prioritize treatment regimens that are less susceptible to diversion for illicit purposes….” The agreement directs SAMHSA to “update all of its public-facing information and treatment locators such that all evidence-based innovations in counseling, recovery support, and abstinence-based relapse prevention medication-assisted treatments are fully incorporated.”

Of the $78M provided for Criminal Justice activities, no less than $60M is directed to be used for drug court activities.

Under the Substance Abuse Prevention Programs of Regional and National Significance, $12M is provided for grants to prevent prescription drug/opioid overdose. The Report language states that “This program will help States equip and train first responders with the use of devices that rapidly reverse the effects of opioids. SAMHSA is directed to ensure applicants outline how proposed activities in the grant would work with treatment and recovery communities in addition to first responders. Furthermore, the agreement provides $10M for the Strategic Prevention Framework Rx program to increase awareness of opioid abuse and misuse in communities. SAMHSA shall collaborate with CDC to implement the most effective outreach strategy and to reduce duplication of activities.” The Report language also urges SAMHSA to take steps to encourage and support the use of the Block Grant Funds for opioid safety education and training, including initiatives that improve access for licensed healthcare professionals, including paramedics, to naltrexone and other emergency devices used to rapidly reverse the effects of opioid overdoses.

US Department of Health and Hospital Services/Office of Secretary

Provides that no funding may be used to advocate or promote gun control.

Agriculture and FDA

Prevents funding being used for the release or implementation of the final version of the 8th edition of the Dietary Guidelines for Americans (DGA) unless the Secretaries of Agriculture and of Health ensure that each revision to any nutritional or dietary information or guideline contained in the 2010 edition of the DGA and each new nutritional or dietary information or guideline is based on significant scientific agreement and is limited in scope to nutritional and dietary information.

Also requires a comprehensive study by the National Academy of Medicine of both the process used to create the Advisory Committee for the DGA and the development of the revised guidelines. Includes specific directives for what the study should cover.

Prevents funds from being used to implement any regulations under School Lunch programs, WIC, etc. that would require reduced sodium in federally reimbursed meals, foods, and snacks until the latest scientific research establishes that the reduction is beneficial for children; also allows states to grant exemptions to schools from the whole grain requirements.

Postpones implementation of final rules on Food and Nutrition Labeling of Menu Items for Restaurants

Section 502 relates to Medicare payment for X-rays and other imaging services, and does the following:

Part B Services

It reduces payments for the “technical” (versus “professional”) component of film X-rays on film (versus digital) starting in 2017, by 20 percent. (The RUC is transitioning valuation of X-rays from film to digital technology, but medicine generally opposes Congressional interference in valuation.) These reductions would be exempt from the budget-neutrality calculation.

It also reduces payments for the “technical component” of “computed radiography” by 7 percent in 2018-2022 and by 10 percent starting in 2023. “Computed radiography” is defined as cassette-based imaging that uses an imaging plate.

The Secretary could adopt new code modifiers to implement the preceding two reductions.

It substantially reduces the current 25 percent discount that is applied to the “professional component” (i.e., the radiologists’ services) when there are multiple imaging services, to just 5 percent, starting in 2017. This would be exempt from budget-neutrality calculations. It also repeals the PAMA provision requiring the Secretary to disclose how it computes this reduction (which now seems obsolete).

Hospital Outpatient Departments (HOPDs)

Reduces payment for film (versus digital) X-rays by 20 percent starting in 2017.

Phases in reductions for “computed radiography” at the same levels as Part B services—7 percent in 2018-2022 and 10 percent starting in 2023.

These two adjustments would be exempt from budget neutrality and could be implemented with the use of code modifiers.

Section 503 would limit the federal share of Medicaid payments for durable medical equipment (DME) to what Medicare would pay, but allows states to make additional payments. (Medicare payments for DME have been decreasing under the new competitive bidding program.)

Section 504 would require Medicare, starting in 2017, to pay for the home use of negative pressure wound therapy devices, which can rapidly speed up healing when used appropriately. It also calls for a GAO study & report on the value of these and other “disposable” medical devices (versus “permanent” durable medical equipment).

Other Provisions:

Increased NIH funding in general and the Precision Medicine Initiative funding which provides support for the new PMI: $70M to NCI and $130M in the Common Fund to fund activities in fiscal year 2016.

Funds for Department of Veterans Affairs grants for the purchase and implementation of telehealth services, including pilots and demonstrations on the use of electronic health records to coordinate rural veterans care between rural providers and the Department of Veterans Affairs electronic health record system.

General funding available to support grants for telemedicine and distance learning services in rural areas.

Recovery Audit Contractors (RACs). The agreement reiterates the fiscal year 2015 explanatory statement language directing HHS to take steps to improve consistency, transparency, and processing of appeals. CMS is encouraged, within the existing authorities, to use offsetting collections it maintains from the RAC program to further educate health care providers on how to reduce errors and take other actions aimed at reducing the backlog of appeals at the Office of Medicare Hearings and Appeals. The agreement expects audits to be conducted in a manner that is valid and statistically sound and requests CMS to continue to monitor the return on investment for compensating auditors on a contingency fee basis, review contractor audit practices, and provide an update on actions related to these items in the fiscal year 2017 budget request. The agreement reiterates its request for CMS's actuarial data to be included in the annual budget request as noted in the fiscal year 2015 explanatory statement. Finally, CMS is expected to provide the Committees on Appropriations of the House of Representatives and the Senate a quarterly update from the inter-agency working group actions taken or planned to address the various issues related to the RAC process.

The Secretary could adopt new code modifiers to implement the preceding two reductions.

The Secretary could adopt new code modifiers to implement the preceding two reductions.

The Secretary could adopt new code modifiers to implement the preceding two reductions.